Northampton County Council challenges legality of John Brown budget

Northampton County Councilman Lamont McClure objecting to Executive John Brown's proposal the county balance the budget with a $20.1 million line of credit.

Northampton County Councilman Lamont McClure objecting to Executive John Brown's proposal the county balance the budget with a $20.1 million line of credit.

Of The Morning Call

Northampton County Council asks of 2015 budget balancing maneuver: is it legal? Is it wise?

Concerns over whether County Executive John Brown's budget balancing maneuver is legal and prudent dominated the first of Northampton County Council's budget hearings Wednesday.

Brown's budget doesn't raise taxes, but relies on a line of credit to fill a $20 million hole. In preparing his first budget, Brown has had to contend with a structural deficit, stagnant property tax revenue and a shortage of the reserves previous budgets have tapped to cover multi-million-dollar deficits.

The Republican's answer to those challenges was met with immediate questions about balanced budget requirements in the home rule charter.

Republican Council President Peg Ferraro said Wednesday that the board's solicitor will provide an opinion at Thursday's regular meeting. Brown's solicitor has not weighed in.

Even if found to be legal, the budget will have to win the votes of council members skeptical of deficit financing.

"If you have [the line of credit] in here to make this balanced, when I vote on this it seems like I'm voting to finance ongoing operations," Republican Councilman Hayden Phillips said.

Under the proposed budget, the county would spend $334.4 million in 2015, a $16.2 million reduction from this year. The tax rate would remain 10.8 mills.

While the past two budgets were balanced with roughly $18 million in reserves — though not all of that was actually spent — Brown said he doesn't have the luxury of a healthy reserve fund.

"Unlike in the past, we cannot depend on reserves in the budget," he told council Wednesday.

The county's rainy day fund has grown ever smaller since the end of 2011, when it held roughly $60 million. Officials expect to spend the fund down to about $20 million by the end of this year, an amount designated for emergency needs and roughly the equivalent of two months of operating costs. Auditors would prefer that number to be closer to $66 million, or $33 million at a minimum.

Brown has described the line of credit as a fail-safe measure in case changes he's instituting don't save enough money to balance the budget. The administration needs the line of credit to balance the budget on paper, Jim Hunter, director of fiscal affairs said, but hopefully won't need to spend the $20 million.

Several councilmen were also unhappy Brown froze funding for most new open space projects. That funding is generated by a half-mill property tax. There's still $1 million for parks, which matches this year's levels.

In 2014, the county is budgeted to spend more than $1 million on farmland preservation, $620,000 on environmentally sensitive lands and $120,000 on county parks.

"With the [natural gas] pipeline about to put a big scar through the middle of Northampton County, I'm not sure this is the time to abandon open space," McClure argued.

Projects in the queue will still go ahead, Brown said, and he'll revisit funding in 2016.

The proposed break in 2015 shouldn't be taken as a sign the administration is abandoning the program, he said: "I don't think it's unreasonable, considering we've met our original commitment, to take a step back for a year."